unit 5 ap comp gov flashcards

Economic globalization

The increased interconnectedness of people, states, and economies including the flow of economic activity, technology, and communications around the world.

International Monetary Fund (IMF)

An international organization that provides financial assistance and policy advice to member countries facing economic crises; in exchange for loans it requires structural adjustment programs including privatization, tariff reduction, and austerity measures.

World Bank

An international financial institution that provides loans and grants to developing countries for capital projects aimed at reducing poverty and promoting economic development.

World Trade Organization (WTO)

A supranational organization that facilitates global trade through regulatory agreements, resolves trade disputes, and works to reduce tariffs and trade barriers among member nations; successor to GATT.

Multinational corporations (MNCs)

A company with facilities or assets in more than one country.

Neoliberalism (neoliberal economic policies)

A market-oriented ideology associated with free trade, privatization of state industries, deregulation, reduced government spending, and economic liberalization; often promoted by the IMF and World Bank as conditions for loans.

Special economic zones (SEZs)

A strategically located area in China with a large labor pool, well-developed infrastructure, and tax incentives to attract foreign companies.

Privatization

When a government transfers ownership and control of a nationalized industry to the private sector.

PEMEX

The company that oversaw all of Mexico's oil production (nationalized in 1938).

Nigerian National Petroleum Corporation (NNPC)

Forms joint investments with foreign companies to extract and produce oil.

Re-nationalization

The process of transferring privately owned assets or industries back into the control of the government.

Foreign direct investment (FDI)

The creation of or investment in a business in one country by an entity from another country.

Environmental degradation

The deterioration of the natural environment through pollution, resource depletion, and industrial damage caused by rapid industrialization and globalization.

United Nations

An international organization founded in 1945 to promote peace, security, and cooperation among nations; the five permanent Security Council members (U.S., UK, France, Russia, China) each hold veto power.

Economic liberalization

Economic policies that support the free market and reduce trade barriers.

Trade deficit

An imbalance in international trade in which the value of a country's imports exceeds the value of its exports.

Urban sprawl

The uncontrolled expansion of urban areas driven by rapid industrialization, rural-to-urban migration, and lack of government regulation.

Structural adjustment program

Requirements for receiving assistance from international lenders (such as the IMF) including the privatization of state-owned companies, reducing tariffs, and reducing subsidies for domestic industries.

Import substitution industrialization (ISI)

Enacting high tariffs and providing incentives to encourage the growth of domestic manufacturing aimed at reducing dependence on other countries.

Supranational organizations

Organizations in which member states grant the governing body sovereignty over certain policies (typically related to trade).

Economic Community of West African States (ECOWAS)

A regional supranational organization of West African nations whose goal is to achieve collective self-sufficiency by creating a single trade bloc.

European Union (EU)

A supranational organization of European countries that promotes economic and political integration.

Austerity measures

Policies implemented by governments to reduce spending, increase taxes, and cut public services in order to address budget deficits or economic crises.

North American Free Trade Agreement (NAFTA)

Eliminated most trade barriers between the United States, Mexico, and Canada; replaced by the USMCA in 2018.

Maquiladora zones

Manufacturing plants set up just south of the U.S.-Mexico border to take advantage of inexpensive labor.

Rentier states

A state that relies on the export of oil or from the leasing of resources to foreign entities as a significant source of government revenue.

Resource curse

A problem faced by countries that have a valuable and abundant natural resource which limits diversification of the economy.

Inflation

The general increase in prices for goods and services over time, which reduces the purchasing power of money.